The manufacturer of the iconic Philadelphia favorite Tastykakes snack foods line is experiencing a financial squeeze from its new $78-million bakery in Philadelphia and its associated $100 million in debt. The problems could force the firm to sell-three years from its 100th anniversary.
Tasty Baking Co.’s state-of-the-art, $78-million bakery facility in Philadelphia’s Navy Yard was supposed to extract the company from its nostalgic roots and into a broader spotlight, but the $100 million it incurred in debt used to build the new bakery, coupled with a failure to gain anticipated cost savings from the plant has done otherwise.
Tastykakes are iconic in Philadelphia. So much so, that Gov. Ed Rendell says that Pennsylvania is prepared to offer Tasty Baking a $1-million loan. The company announced last week that several factors led it to consider its options, including a potential merger or sale. Reports indicate that it skipped a debt payment due on Jan. 1 and was to work out a deal with the banks, led by Citizens Bank of Pennsylvania, to avoid default.
Charles P. Pizzi, Tasty's chief executive, has declined interviews, according to reports. He issued a statement: "There is no question in my mind that in order for Tasty Baking to thrive, the steps we took were the right ones."
Source: ABSnews.go.com, www.philly.com
Tasty Baking Faces Financial Troubles, Possible Sale
January 14, 2011